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President Joe Biden’s statement dated August 9, 2023Executive Order No. 14105“Addressing U.S. Investments in Certain National Security Technologies and Products in Countries of Concern,” also known as “outbound order” final rule was published through the U.S. Department of the Treasury on October 28, 2024. The rule prohibits trading with or investing in certain “countries of concern” in technologies that pose a national security threat, such as semiconductors, quantum information technology, and AI technology. President Biden has designated the People’s Republic of China, the Hong Kong Special Administrative Region, and the Macau Special Administrative Region as countries of concern.
Treasury Issues Regulations to Implement Executive Order Addressing US Investments in Certain National Security Technologies and Products in Countries of Concern | US Department of the Treasury
https://home.treasury.gov/news/press-releases/jy2687
FACT SHEET: Addressing US Investments in Certain National Security Technologies and Products in Countries of Concern | The White House
https://www.whitehouse.gov/briefing-room/statements-releases/2024/10/28/fact-sheet-addressing-us-investments-in-certain-national-security-technologies-and-products-in- countries-of-concern/
McHenry Statement on Treasury’s Outbound Investment Final Rule | Financial Services Committee
https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=409401
Outbound orders prohibit Americans from doing business with persons from “countries of concern” that involve technology or products that pose a particularly serious national security threat to the United States, and that may pose a national security threat. This law requires the Ministry of Finance to be notified of any transactions involving sensitive technology or products with persons from countries of concern.
The three target technologies and products are semiconductors & microelectronics, quantum information technology, and AI.
President Biden designated China, Hong Kong, and Macau as countries of concern, and announced that the final rule would go into effect on January 2, 2025.
According to CSET, a think tank specializing in security, from 2015 to 2021, American investors invested $40.2 billion (approximately 6.15 trillion yen) in 251 Chinese AI companies.pouring inthis accounted for 37% of the amount raised by all Chinese companies working on AI.
However, regarding these investments, the White House has said, “While cross-border investment and America’s open investment policy contribute to our economic vitality, concerned countries are exploiting this to protect our national security interests.” “There is a possibility that they are accelerating the development of sensitive technologies and products that undermine the country’s security.” “The Biden-Harris Administration is committed to protecting our nation’s security by preventing advances in key technologies critical to military modernization by countries of concern, namely China,” it added, adding a series of rules to take effect. I explained the meaning.
Paul Rosen, assistant secretary for investment security, said in a Treasury release: “The Biden-Harris administration will protect America’s national security and protect critical advanced technology that could potentially threaten national security. We are committed to keeping AI, semiconductors, and quantum technologies out of the hands of the next generation of military, surveillance, intelligence, and other industries, such as cutting-edge code-breaking computer systems and next-generation fighter jets. This final rule provides targeted concrete measures to ensure that American investments are not misused to advance the development of critical technologies such as those mentioned above. This is a measure of concern.”
In announcing the rule, House Financial Services Committee Chairman Patrick McHenry said, “The most prominent advocate of restricting U.S. investment in China is, of course, Xi Jinping.” “This is a targeted effort to cut off funding to the surveillance complex. I appreciate the Treasury Department’s focus on military technology.”
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